According to a recent press report, the IDBI bank has cut down the interest rate on floating rate home loan scheme by 25 to 50 basis points for its existing customers. For new customers, the bank has introduced fixed-cum-floating rate scheme. The bank said that it has decided to offer the concession of 100 basis points in the interest rate of auto loans irrespective of its sector.
Reports said that the review of home loans was mainly done on the examination of market scenario, competition offerings and also to add value to the customers during the festival season. The borrowers are given an option to either choose fully floating rate or a combination of fixed and floating rates.
The bank has ignored the processing fee for loan amount upto Rs.25 lakhs. In case of fixed-cum-floating interest rate, the interest rate will be fixed for the first two years and later interest rate would change during the revision of basis point. The current IDBI bank’s rate is 10.75 per cent.
The home loan under composite fixed-cum-floating interest rate ranges from 10.75 per cent to 11.75 per cent. And for fixed interest rate it ranges from 11 to 12 per cent. The bank has decided to ignore the processing fee for auto loans. All the new proposals would be applicable only to the loans which are sanctioned between October 15 and December 31, 2011.